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Take-Two Interactive Software, Inc., and Rockstar Games, Inc. — the companies that make and published the popular videogame Grand Theft Auto: San Andreas — agreed to settle Federal Trade Commission charges that they failed to tell consumers that the game contained nude female characters and a playable sex mini-game. The companies also failed to tell the Entertainment Software Rating Board (“ESRB”) about these features while it was rating the game.

When the ESRB finally learned about these features, it gave the game a more restrictive rating. The ESRB originally rated the game “M” for Mature. Videogames rated “M” contain content that may be inappropriate for those aged 17 and under. The rating information, including the rating symbol and content descriptors, appeared in print, television, and retailer ads for the game, and on game packaging. The ESRB re-rated San Andreas AO (“Adults Only”). Games rated AO have content that should only be played by persons 18 and older. As a result of the re-rating, many national retailers pulled the game from their shelves.

According to Take-Two Interactive, the company incurred $24.5 million in costs associated with returns of San Andreas stemming from the re-rating. The companies subsequently published a second, M-rated edition of San Andreas without the nude images and mini-game content.

The FTC’s complaint charged that the companies violated the FTC Act by representing that San Andreas had been rated “Mature” and assigned certain content descriptors by the ESRB, but failing to disclose to consumers that the game discs contained unused, but potentially viewable, nude female images and disabled, but potentially playable, software code for a sexually explicit mini-game that the ESRB had not rated.

The FTCconsent agreement requires Take-Two and Rockstar Games to clearly and prominently disclose on product packaging and in any promotion or advertisement for electronic games, content relevant to the rating, unless that content had been disclosed sufficiently in prior submissions to the rating authority. In addition, the companies cannot misrepresent the rating or content descriptors for an electronic game. Finally, the companies must establish, implement, and maintain a comprehensive system reasonably designed to ensure that all content in an electronic game is considered and reviewed in preparing submissions to a rating authority.

The companies will be subject to civil penalties of up to $11,000 per violation if they violate the order. The companies will be subject to compliance reporting requirements to ensure that they meet the terms of the order.